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Bull Market (Bullish):
Okay, let's learn some common words you'll hear in the stock market game.
Learning the Lingo
Level Three
Bear Market (Bearish):
Imagine a bull charging upwards! This means the overall market is optimistic, and prices are generally going UP. If you think a specific share's price will go up, you are bullish on it.
Think of a bear swiping downwards. This means the market is pessimistic, and prices are generally going DOWN. If you expect a share's price to fall, you are bearish.
The general direction the market (or a specific share) is heading.
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Bullish Trend: Moving mostly upwards.
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Bearish Trend: Moving mostly downwards.
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Sideways Trend: Not really going up or down, just moving horizontally. Like the game is paused or in a stalemate.
Trend:
Face Value (FV):
The original price tag the company put on the share when it was first created. It's mostly used for technical company actions (like calculating dividends sometimes) and isn't the price you trade at. Think of it as the item's base manufacturing cost, not its current market value.
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52-Week High: The highest price a share reached in the last year (like the highest score achieved in the last game season). Some players see this as a sign it might keep going up.
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52-Week Low: The lowest price in the last year. Some players worry it might keep falling.
52-Week High/Low:
All-Time High/Low:
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All-Time High: The absolute highest price the share has ever reached in its history.
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All-Time Low: The absolute lowest price it has ever reached.
This is a more advanced move. You SELL a share first (even though you don't own it yet!) because you are bearish – you expect the price to go DOWN. If it does, you then BUY it back at the lower price to complete the trade and pocket the difference.
Short Position (Going Short / Short Selling):
This is the most common move. You BUY a share because you are bullish- you expect the price to go UP, so you can sell it later for a profit. Strategy: Buy Low, Sell High.
Long Position (Going Long):
Game Analogy: Imagine you know a rare item's price is about to drop in the game's auction house. You agree to sell it to someone now at the current high price. Then, when the price drops, you quickly buy it cheap and deliver it to the person you promised it to, keeping the profit.
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Closing Your Trade (Squaring Off)
Squaring Off simply means closing whatever position you currently have open.
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If you are Long (you bought shares), you need to Sell them to square off.
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If you are Short (you sold borrowed shares), you need to Buy them back to square off.
Important: Squaring off is just exiting your current trade. It's not the same as starting a new long or short position.
Intraday Trading:
Playing a mini-game within the main game. You buy AND sell the same share within the same trading day. You don't hold any position overnight.
Other Important Terms
OHLC (Open, High, Low, Close):
These are the four key price points for a share during a single trading day:
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Open: The price when the market game started for the day.
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High: The highest price reached during the day's session.
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Low: The lowest price reached during the day's session.
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Close: The final price when the market game ended for the day.
Volume:
The total number of shares of a company that were traded (bought and sold) during the day. High volume means lots of players were actively trading that share – it was a popular item that day!
Different Game Arenas (Market Segments)
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The stock market isn't just one big room. Think of it as having different arenas or sections for different types of trading:
Capital Market (Equity Market):
This is the main arena we've been talking about, where regular company shares (stocks/equities) and similar things like ETFs (Exchange Traded Funds - baskets of shares) are traded.
This is a more advanced, high-stakes arena. Players trade contracts based on the expected future price of shares or indices. It involves leverage (like using borrowed power), making it riskier but also offering potential for higher gains/losses. (We'll explore this arena later!).
Futures & Options (F&O) Market (Derivatives):
This arena is mostly for big players trading things like Bonds (loans to companies or governments) and other fixed-income items. Think of it as trading IOUs.